Browser competition and the search for a business model

In the fall of 1995, Microsoft began an urgent campaign to turn toward the Internet. It started by licensing the browser code that Andreessen and his NCSA associates had written while students, and it feverishly developed Internet Explorer, a browser that gradually caught up with Navigator in features and performance. Microsoft kept Explorer completely free, even for business customers, and moved aggressively to persuade computer makers and ISPs to bundle it instead of Navigator. By 1996 Microsoft was bundling Explorer with Windows OS, and they had begun the process of integrating Explorer directly into Windows.

As a result, Netscape’s market share among browser users, previously estimated at over 80 percent, began to decline. In response, Netscape accused Microsoft of unfair business practices and filed a series of complaints with regulatory bodies; these efforts helped to persuade the U.S. Department of Justice to undertake a broad investigation of Microsoft under antitrust statutes.

Netscape also placed a greater emphasis on sales of server applications and corporate services, and it released a new product, Communicator, which combined the Navigator browser with workgroup-collaboration features designed to appeal to corporate customers. Another initiative was the creation of Netcenter, an information and commerce service built around its heavily trafficked Web site.

In all these areas, however, Netscape faced entrenched competitors. In early 1998 it reported slowing growth and its first quarterly operating loss ever. In an effort to regain market momentum, it declared Navigator and Communicator completely free and even made the programs’ source code available to other developers for customizing and enhancement.

Netscape was purchased by America Online, Inc. (AOL), in November 1998. With the increasing competition from Mozilla Firefox, the open-source browser developed from Navigator, and the continuing market dominance of Explorer, AOL discontinued support for Navigator in 2008.

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